Review of Decision on Expungement of Trade Mark and Rectification of Trade Mark Register in Malaysia

On 26th June 2006, a decision by the Court of Appeal of Malaysia has further clarified the grounds that should be relied upon for seeking the removal of a trademark and rectification of the Trade Mark Register. The case was between internationally renowned shoe and socks manufacturer, Bata Limited, (as the Applicant) being the owner of the “POWER” trade mark and device in Class 25 against the Respondent, who was a local individual, and the proprietor of the “POWER” trade mark with a different device also in Class 25.

Bata Limited had in the first instance applied to the Malaysian High Court to seek the rectification of the Trade Mark Register by the removal and expungement of the Respondent’s POWER trade mark and device.

The basis of Bata’s claim was the confusing similarity between the component word “POWER” contained within the respective parties’ marks as follows:

Bata’s Mark Sim Ah Ba’s Mark

Bata’s Claim

Bata Limited first contention was that it is the original registered proprietor of the POWER trade mark in Class 25 for shoes, boots and parts thereof, slippers and sandals under Trade Mark Registration No. M/57693 registered on 23rd August 1971. Bata Limited also claimed that it had used the said POWER trade mark since 1971 for its goods as registered. It also claimed that over time, the mark had gained significant reputation and goodwill and substantial income was generated from it.

It transpired that the said Sim Ah Ba had also registered the POWER trade mark on 5th July 1988 in Class 25 for goods namely socks and underwear. Bata claimed that the said Sim Ah Ba did not invent or create the trade mark but had coined something similar to Bata’s registered trade mark.

Additionally Bata also claimed that the said Sim Ah Ba had failed to use his trade mark subsequent to its registration. Bata then stressed that even if the said Sim Ah Ba had used their trade mark (which was denied), there was an overlapping of trade channels between the parties and has caused confusion and deception to the public. Bata claimed that purchasers intending to buy Bata’s goods would mistakenly purchase the said Sim Ah Ba’s goods bearing their POWER trade mark.

Sim Ah Ba’s Defence

Sim Ah Ba had denied all the allegations made by Bata and explained further that they had never copied from Bata’s registered trade mark. Although admitting that there may be some minor similarities to Bata’s mark, they had claimed that this would not cause confusion and deception to the public.

The said Sim Ah Ba then proceeded to explain that they have used their trade mark after having applied for registration. However, they lacked documentary evidence to support this contention. Sim Ah Ba went on to explain that overlapping of trade channels was not possible since Bata Limited only sold its goods in its own ‘BATA’ shops or those under its franchise. This is whilst the said Sim Ah Ba’s goods were retailed in general merchandised stores suggesting completely different trade channels whilst claiming little likelihood of confusion and deception to the public.

Finding and Decision of the Trial Judge

The trial Judge had dismissed the Bata’s application. His reasons are as follows:

Firstly, it was accepted that Bata Limited is an aggrieved party to bring this application. The Trial Judge had then proceeded to deal with Bata Limited complaint that Sim Ah Ba’s trade mark is not distinctive due to similarity that exists between the respective parties marks’.

Although addressing that some confusion may arise over the word ‘POWER’ in the said Sim Ah Ba’s trade mark, the Trial Judge felt that this could be neutralized by the different type of goods registered under the said Sim Ah Ba’s trade mark from that of Bata’s. In the case of Bata’s trade mark, the goods specified are shoes, boots of any part thereof, slippers and sandals. It does not include socks and underwear for which the said Sim Ah Ba’s trade mark was registered.

The Trial Judge further pointed out that apart from the word ‘POWER’, other significant features in the two contending trade marks were different. Finally, the Trial Judge declared that Bata has no exclusive right to use of the word ‘POWER’ as the word is a common and generic word and that a disclaimer had been imposed over it by the Registrar of Trade Mark.

Based on the abovementioned grounds, the Trial Judge held that the public would not be confused and deceived by existence of the two conflicting marks, thereby dismissing Bata’s application for rectification of the Trade Mark Register by the removal and expungement of the said Sim Ah Ba’s POWER and device trade mark.

Appeal by Bata Limited

Bata Limited had then appealed to the Malaysian Court of Appeal on the dismissal of the application by the Trial Judge in the High Court of Malaysia.

The Court of Appeal in hearing the appeal before them, considered the issue of whether the period for evaluating distinctiveness of the said Sim Ah Ba’s mark for expungement would be “at the commencement of the proceedings” or otherwise as contended by Bata Limited being when Sim Ah Ba applied for registration of their POWER and device trade mark.

Relying upon Section 45 of the Trade Marks Act 1976 that stipulates provisions for rectification of the Trade Mark Register by the removal and expungement of a trade mark, the Court of Appeal reiterated that an evaluation exercise needs be done and the court must confine itself to only those situations described in Section 37 of the Trade Marks Act. The situations stipulated within Section 37 are as follows:

(a) that the original registration was obtained by fraud;

(b) that the trade mark offends against Section 14 (of the Act); or

(c) that the trade mark was not, at the commencement of the rectification proceedings, distinctive of the goods or services of the registered proprietor

Factors Considered

The Court of Appeal considered the following factors to determine the distinctiveness of the said Sim Ah Ba’s POWER and Device trade mark as follows:

1. Whether the original registration of the trade mark was obtained by fraud.

2. Whether Sim Ah Ba’s POWER and Device trade mark is likely to deceive or cause confusion to the public or is contrary to law.

3. Whether Sim Ah Ba’s POWER and Device trade mark contains or comprises any scandalous or offensive matter or would otherwise not be entitled to the protection by any court of law.

4. Whether Sim Ah Ba’s POWER and Device trade mark contains a matter which in the opinion of the Registrar is or might be prejudicial to the interest or security of the nation.

5. Whether Sim Ah Ba’s POWER and Device trade mark is, at the commencement of the proceedings, distinctive of the goods or services of its registered proprietor.

The Court of Appeal then proceeded to consider relevant factors 2 and 5 in the above case.

Likely to deceive or cause confusion to the public

The Court was guided by the factors which are can be summarized as follows:

(a) the idea of the mark is to be regarded;

(b) the elements of the mark must be taken as a whole;

(c) imperfect recollection of the mark by customers or purchasers should be taken into account;

(d) the aural as well as the visual aspect of a customer towards the mark is relevant; and

(e) all the circumstances of the trade to be considered.

The Court of Appeal found that there is little likelihood that the general public would be confused and deceived by the presence of the two conflicting marks. The Court of Appeal also concluded, having taken into account all relevant factors, that the probable customers or purchasers of goods retailed by Bata Limited would not be foolish as to buy the said Sim Ah Ba’s goods sold under the POWER and Device trade mark by mistake for goods originating from Bata Limited. Therefore, the Court concluded that there is no real tangible possibility of confusion or deception to the public by the use of the said Sim Ah Ba’s POWER and Device trade mark.

Whether the trade mark is distinctive of Sim Ah Ba’s goods at the commencement of Rectification proceedings.

The Court of Appeal addressed the issue that Bata Limited has only adduced evidence of non-distinctiveness of the said Sim Ah Ba’s goods to their POWER and Device trade mark at the time of registration and not at the commencement of the rectification proceedings. The Court stressed that provisions of Section 37 (c) of the Trade Marks Act specifically demands evidence to establish that non-distinctiveness should be “at the commencement of the proceedings” and at no other time.

The decision of the Court of Appeal

Due to Bata Limited’s failure in adducing evidence to establish non-distinctiveness within the precise and correct time frame, the Court of Appeal dismissed Bata Limited’s appeal with costs.

Therefore, it follows that for an application for rectification of the Trade Mark Register by the expungement of a trade mark in Malaysia, apart from issues of confusing similarity claimed between the conflicting marks, the Applicant must adduce evidence to establish non-distinctiveness of the conflicting mark at the commencement of the rectification proceedings pursuant to Section 37 of the Trade Marks Act 1976.